Steven Rattner, the former top auto adviser, highlights his five months overseeing the GM and Chrysler bankruptcies. Strikes impact the global auto industry. A couple reveals from Honda and Toyota at the Tokyo Motor Show. All that and more, plus Christie Schweinsberg from Ward’s Auto shares her thoughts on this year’s Ward’s 10 Best engines competition.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. The former U.S. car czar paints a grim picture. Strikes impact the global auto industry. And a couple reveals from the Tokyo Motor Show.

Up next, we’ll be back with the news behind the headlines.

This is Autoline Daily for Wednesday, October 21, 2009. Again, I’m Christie Schweinsberg from Ward’s Auto taking another turn in the anchor chair. Here’s today’s top news.

In an article published in Fortune Magazine, Steven Rattner, President Obama’s former top auto adviser, highlights his five months overseeing the GM and Chrysler bankruptcies. According to the Detroit News, Rattner paints a grim picture of management at the two companies. He wrote, “We were shocked, even beyond our low expectations, by the poor state of both GM and Chrysler.” He also details just how close Chrysler came to going under. The task force didn’t want to keep the company on life support if it was just going to die, but ultimately the thought of losing 300,000-plus jobs convinced the President that Chrysler was worth saving … IF a deal with Fiat could be worked out. The situation at GM was almost as bad. He wrote that the company probably had the weakest finance operation of any major corporation. For more information on this bombshell story, follow the links in today’s transcript.

If the GM/Opel sale ever needed a theme song you probably couldn’t go wrong with the Albert King blues classic “Born Under A Bad Sign.” The Wall Street Journal reports that, just as the European Commission appeared to give the deal a green light, a red one lit up in Spain. That’s where labor unions turned down prospective buyer Magna’s latest offer (subscription required) on job cuts and issued a four-day strike. The union not only wants to lighten the some 1,400 expected job cuts, but to also make sure Opel production continues in Spain. It goes back to that funding that Germany gave the deal, as long as all four of its plants remain open.

Meanwhile, the Journal also reports more strikes – this time in India. Auto parts workers walked out yesterday to protest the suspicious death of a protesting worker. There’s a question about how big the strike is – one labor union says 90,000 workers are out while auto executives put the number at only a few thousand. What concerns observers is that the strike is focused in the state of Haryana, the auto industry hub of the country where more than 200 companies account for nearly 60 percent of the parts produced. So if the strike grows, or lasts more than a week, it might have a broad effect on the country’s auto industry.

Yesterday we reported that strong passenger car sales would propel Fiat to a profit in the third quarter. But apparently they weren’t strong enough. According to the AP, Fiat announced a loss for the third quarter of $250 million or about 170 million euros. The lower-than-expected earnings were due to losses at its truck and farm, and construction businesses.

Lexus has FINALLY revealed the production version of its LFA supercar. Autoblog tells us the rear-wheel-drive, two-seater features a 4.8-liter V-10 with 552 horsepower and a 9,000 RPM redline. Backing the engine is a six-speed sequential gearbox. Zero to 100 kilometers an hour should take about 3.7 seconds, with a top speed north of 200 miles an hour. The company is only planning on building 500 copies with a price tag of $375,000 each.

Also making its debut at the Tokyo show is the second version of Honda’s sporty hybrid concept, the CR-Z. On display is the global version of the car that has a rear seat, but when the production version is introduced at next year’s auto show in Detroit, it will be packaged as a two-seater. Even more interesting, the vehicle will be the first hybrid to offer a six-speed manual transmission.

Coming up next, a few of my thoughts on the annual Ward’s 10 Best engines competition, we’ll be back right after this.

Well, it’s that time of year again, when Ward’s editors park their cars for two months and drive a different test vehicle every day. Are we nuts? Probably, but we have a mission: to find the 10 Best engines in the U.S. auto industry for 2009.

The competition started in September and, I don’t know about my fellow judges, but already I’m feeling overwhelmed. This year’s crop of candidates are some of the best engines we’ve ever encountered.

John Mendel of American Honda, always good for a colorful quote, told me just last week that “Nobody is building crap anymore.” which fits perfectly with this year’s 10-Best crop…featuring all last year’s winners along with 25 other candidates…and we’ve been driving them all!!. Engines as diverse as small, fuel efficient hybrids, all the way to those big new V-8s.

Now, unlike previous years, when our hallways have been filled with talk of power density, torque and horsepower, fuel-efficiency and hybrids seem to be getting a lot of positive buzz.

Besides the Honda Insight, Ward’s 10-Best judges also have tested Ford Motor Co.’s 2.5-liter inline-four, a returning winner– last year in the Ford Escape Hybrid but this year in the company’s Fusion Hybrid sedan.

Typically we’ve only had one hybrid on the list, if any. But this year I wouldn’t be surprised if we award at least two spots to HEVs. After all, the marketplace, and the world, is changing.

The fuel economy we’ve seen so far has been phenomenal, with Ward’s Tom Murphy, in just one example, recording a surprising 55 mpgs from the Fusion.

And we still have more hybrids to come, including the reigning sales champ, the Toyota Prius.

Some of my fellow judges swear by the adage “the more cylinders the better.” But I’ve been pushing for our list to be more reflective of the times, and that means fewer gas-chugging V-8s, or V-6s getting a paltry 22 mpgs, and more four-cylinders, be they hybrids, turbo fours or plain old normally aspirated fours.

But, as you may imagine, some of my fellow judges would sooner die than allow a 10-Best list without at least one V-8. Memo to them: It’s time for a change and I’m ready for a fight.

And that’s it for today’s top news in the global automotive industry. Again, I’m Christie Schweinsberg from Ward’s Auto sitting in for John McElroy as temporary host. Anyway, thanks for watching, we’ll catch you later.

John Mendel’s quote is quite ironic when put into context of Honda’s recent string of disappointing vehicles – Element, Ridgeline, Pilot, Acura RL – or relative to Honda’s timid IMA system while other major manufacturers (Ford and Toyota) offer a real HEV.

Mendel’s comments were very intertesting. Was he implying that Hyundai and Kia do not make crap any more, or did he mean Ford? And he did not specify since when exactly did they stop making crap? 2007? 2002? 1998? or even earlier?

PS Andy, Honda and esp. Acura has lost its way since almost 1994, with poor exterior styling and overall packages, but still, NONE of their vehicles can be labeled “crap”.

“Ward’s Tom Murphy, in just one example, recording a surprising 55 mpgs from the Fusion.”

It helps when you go downhill on a sharp incline, doesn’t it?

I do not know what this guy is talking about, but I have seen DOZENS of reports about the FUsions alleged 41 (much less …55) MPG, and NONE could get even close to it, and, predictably, most people got the same MPG in the Fusion Hybrid as in the same-sized Camry Hybrid, which has a much lower (33 or 34) MPG rating.

Nick, I have driven the Fusion HEV. It does get f.e. in the 40s and can get into the 50s with the a sensitive right foot. I personally drove it back and forth to the gym (about 2 miles away; mix of 25-45 MPH) in battery mode… no dino juice. My neighbor is consistently recording in the low to mid 40s over a greater diversity of driving conditions.

We need to let our minds be open to change. If not, we’d still be criticizing Honda and Toyota for their rusted-out, oil smoking imports in the 1970s. Honda and Toyota changed. Can we accpet that other manufacturers have also changed? Come on, you can say it. It won’t hurt. Starts with F and rhymes with lord. There you go. It didn’t hurt one bit. Now, drive one!

just because you and your neighnbor may have seen 40s on your screen (which may not even be the accurate MPG you measure MANUALLY) does not mean that all the DOZENS of auto journalists that were suspicious of the big difference even in EPA official MPG numbers between the Fusion and the same-sized Camry were wrong. So you are just one datapoint, and probably one not measured accurately, to their dozens. And they all were able to get about the same from both sedans, as common sense would tell anybody toi expect, and the numbers were closer to the Camry’s EPA numbers of 34, and NOT the inflated Fusion EPA 41, which they got by god knows how they GAMED THE SYSTEM.

But I was not commenting on peoplke getting 40 or even 45, but about this person at WArds that got 55 MPG. Not even FORD claims that. I am a Doubting Thomas on that, and i want to see the full and complete proof. Andf it has NOTHING to do with TOyota and its undeniable leadership in hybrids, or Honda, which has so far failed, and may even be behind Ford in Hybrid sales soon.

If some naive person goes out and buys the FDusion Hybrid because Wards says they got 55 MPG and that person believes he will get an average lifetime MPG of 55 (because this is what counts, I could care less if you got 55 mpg for a split second@!!!),

THEN that naive person has no common sense and maybe deserves the huge dissappointment he will experience. Or she.

Hopefully Wards runs no risk of being sued by such a person for these wild claims.

if you want any proof of the incompetence of the onetime Big 3, today’s broadcast or webcast gives it to you.

GM and the others never, ever could make a small car at a profit. hence all the outsourcing of such cars to factories in MExico, or even to entire different companies in South Korea, such as Daewoo, which GM bought, which makes thew Aveo and even designed or engineered the new Chevy Cruze.

Honda, on the other hand, is reported today to be considering making the Fit, as small a car as any, in the US, because it costs it LESS than making it in Japan or wherever it makes it now!

It doesn’t appear that Lexus is bringing much to the table with the LFA. Design (though subjective) is basically a repeat of a lot of other current type shapes, performance (though impressive) should be at the price they are asking, and a monster supercar (at this time) seems to be a mis-launch.

Among all lexus cars, the only one who has succeeded is the flagship LS. All others are either rebadged camrys (ES) or BMw 3-series wannabe failures like the IS, or pseudo-performance cramped family sedans like the $53k GS4–.

Great job, Christie. That was an interesting discussion of the Ward’s 10 Best Engines selection process. If only I could land a job like that!! When I was working for an auto supplier, I got a free subscription to Ward’s, and the 10 Best Engines issue was always my favorite.

There was also a “10 Best Engines of the Century” list in 2000. That one was very interested, and included “engines that changed the world” like the Ford Model T, but one winner on that list, to me, didn’t fit. It was the Buick 3.8 V-6. It should certainly get an award for “most improved,” considering how horrible it was in its original un-balanced, uneven firing life in the 60′s, but one of the 10 best engines of the 20th century? No way.

Both my neighbor and I are as scientific as can be at the fuel pump – consistent filling behaviors and noting fuel consumption over the course of several fill-ups using the old-fashioned method of dividing gallons used into the miles driven… often to the annoyance of our wives. Yes, we consistently and really experience f.e. in the 40s (yes, calculated the old-fashioned way).

Now, I suspect Nick will claim a conspiracy theory about overly ambitious trip odometers. Nope. I have been driving the same route for almost 18 years and know the mileage. And with each new vehicle, I check the odometer calibration while on a very long trip (between highway mile markers, GPS and MapQuest). Also, manufacturers are required to have a accurate odometers to preserve integrity at the end of the warranty.

And if a calculator is needed to estimate the fuel consumed during that one trip to the gym on battery mode, then there is no way to open Nick’s mind. It must be bad when my wife feels sorry for Nick’s wife.

Regarding Fiat losses, partly attributed to losses in other areas. There have been suggestions that they may sell off some divisions in order to concentrate on the auto business. One rumour said they would unload Case & New Holland farm equipment lines. Do you have any news or comments on this?

I haven’t driven a Fusion Hybrid yet, but will soon as we are considering adding one to our home vehicle fleet. It does seem to be highly sensitive to driving habits though, as it appears many folks are coming in below its 41 MPG rating, while others can exceed it by some margin…I hope not by using those sometimes infuriating (and unsafe) hypermiling techniques.

Jim Sachetti Says:
October 21st, 2009 at 3:25 pm
“Among all lexus cars, the only one who has succeeded is the flagship LS. All others are either rebadged camrys (ES) or BMw 3-series wannabe failures like the IS, or pseudo-performance cramped family sedans like the $53k GS4–”

The ES has sold very well, because there are a lot of people willing to pay extra for fancier, and quieter interiors in what is mechanically the same as a Camry. I wouldn’t buy one, but a lot of people do. Another of Lexus’ “failures” is the LX, which is consistantly the top selling Lexus, and is usually the top selling “luxury crossover” or whatever you want to call the catagory.

While the IS isn’t a great seller, it is a very good car. It’s more reliable than a 3 series, has a better interior, and most people wouldn’t appreciate any advantages in the “drive” of the 3 series over the IS.

I fail to understand how a car can be considered a “failure” when I see hundreds of them every week in my travels. I guess most buyers are stupid when they choose a car that may not be as dynamic as the standard bearer of the sports sedan, the 3 series. I see tons of IS’s G35′s, even Acuras all over the place. ps. my best friend drove a V6 Charger rental for a week around the Tenn/ NC area and he found the car grossly underpowered. These companies just don’t get the power to weight ratio importance.

Nice job again Christie, I wish to nominate Toyota’s 2.4 and Honda’s Civic engine as models on how to build a 4 cyl. engine. I wonder if durability/reliability are considered when they vote for best engines? This Honda exec, John Mendel, has obviously never heard of Daewoo. I congratulate most of Autoline viewers, they have been right all along re. the sorry state of affairs at GM and Chrysler.

Curb Weight of the LFA is 1480 kg, but is not directly comparable to the Corvette as it is measured under a different standard. Which standard isn’t specified though. The three major standards are SAE, DIN and EEC (DIN + 75 kg for driver and cargo). I would guess it’s DIN curb weight, but since European specs are given it may be EEC.

Kit, I believe you meant the Lexus RX (not the LX). The RX has been the top selling luxury crossover and is also based on the Camry platform (similar to the Toyota Highlander, Toyota Venza, and Lexus ES).

In contrast, the Lexus LX has been a re-badge of the Toyota Land Cruiser with no more differentiation between the two than you’ll find between a Cadillac Escalade and Chevy Tahoe or a Lincoln Navigator and Ford Expedition or an Infiniti QX and Nissan Armada.

With regards to Rattner, he was accused of running a pay-to-play scheme with his old company in Calif. Gov Bill Richardson is being investigated by the FBI for his dealing with Rattner as well as officials in other states. So I would not believe a word from his mouth.

Now, maybe it just me (Ok it just me) but that Lexus LFA looks more like a Nissan 370.
On the other hand… That Honda CR-Z, I can’t believe Honda its droppping the ball like that, thats one ugly looking car.

I do have one question for Christie…
How important is the sound of an engine in Ward’s test/also considering hybrids vs V8/or turbos V6/or diesels???

For Jim Sachetti—Honda already makes most Fits in either Brazil or Thailand. The Fit Aria sedan (aka Honda City) is ONLY made in Thailand and exported from there to other markets such as Japan and as for “… as small a car as any …”, there are at least three classes of cars smaller than the Fit, which is at the high end of the B-segment and larger than some many older compacts. Below the Fit and Aveo there’s a small class of mainly Japanese cars including the Yaris hatchback, Suzuki Swift and Nissan Micra, the late Ford Ka, the Citroen C2 and the MINI, below that are the largely European and Korean class of minicars—the Chevy Spark, Hyundai i10, Fiat 500 and Panda, Renault Twingo, new Ford Ka, Kia Picanto/Morning, and the Toyota Aygo/Peugeot 107, Citroen C1 triplets manufactured in Eastern Europe. Below that is the JDM only Keijidosha class with restricted size and engine capacity, dominated by Suzuki (which builds vehicles for Nissan and Mazda as well) and Daihatsu. Both build larger models for export, but these are largely built in India, Malaysia, Indonesia and Thailand rather than Japan. Honda sells Kei-cars as well, but development and production is outsourced to another company which Honda only recently acquired a majority stake in. Below that are vehicles such as the smart fortwo and Toyota iQ, but you pay a premium and don’t get better fuel economy. There are smaller vehicles made in Europe, but they also cost more and are classed as quadricycles rather than cars—what in the US would be considered “neighborhood vehicles” unsuited for on-highway driving.

An explanation for the Fusion’s 40mpg could come from Ford’s Nancy Gioia. When she was on AAH she said Ford was able to get more watts out of the battery by extending its operating range. They simply let a higher percentage of energy be used before the battery recharges. I can’t remember if they also charge the battery to a higher percentage of max.

Andy S Says:
October 21st, 2009 at 4:26 pm
Kit, I believe you meant the Lexus RX (not the LX). The RX has been the top selling luxury crossover and is also based on the Camry platform (similar to the Toyota Highlander, Toyota Venza, and Lexus ES).

To Nick Stevens, I own a 2010 Fusion Hybrid and I get 47 MPG’s. This is in real world traffic without many stops and traveling over 50 mph. After 4 fill ups I was getting increasingly better MPG. The car has a 17 gallon tank and I get over 550 miles to the tank. I’ve had a lot of cars with 17 gallon tanks and none of them could touch 350 miles to the tank. So I don’t know where you got your information but Ford has built one the finest midsized hybrids on the market. Test drive one for yourself. And no I do not work for Ford. In fact a traded in a Toyota.

“On the other hand… That Honda CR-Z, I can’t believe Honda its droppping the ball like that, thats one ugly looking car.”

I agree. Honda has some great machinery, including probably the best 4 cylinder engines in the world, but they have lost it on styling. Styling of recent Acuras is even worse than Honda-badged offerings, IMHO. Maybe they need to hire someone away from Jaguar or something.

How many ISa and GSs you see in your specific neighborhood, or how few I see in mine (zero, but a TON of 3 series, they are as many as civics!!!) does not prove anything, just cjeck the SALES NUMBERS and there is the proof.

Fusion Hybrid Defenders:

Drop your false charges. I already accepted that Ford was able to “game the system” and produce a Fusion Hybrid that can be legitimately rated 41 mpg by EPA.

HOWEVER, aside from yoru anedotal stories, all the PUBLISED comparisons I have seen in the mainstream auto mags,the Camry and the Fusion Hybrids got about the same 34ish MPG, AND the Nissan Altima Hybrid I drove also had poor MPG for a hybrid, 32 or so, I believe, was its LIFETIME MPG of the one I drove.

MY comment, I repeat for the THIRD time, was the ridiculous assertion that the FUsionj Hybrid “got 55″ MPG. I already said, sure, under some very favorable conditions one may get 55 for a few miles, BUT I could care less, and so should the prospective bUYERS, WHO SHOULD focus on the lifetime, average MPG, and that AVERAGE for the Fusion and the Camry, I have seen DETAILED stats based on hundreds of owners on websites, are 33-38 MPG (the 50% middle group around the median, if you know any stats you’d understand)

“How many ISa and GSs you see in your specific neighborhood, or how few I see in mine (zero, but a TON of 3 series, they are as many as civics!!!) does not prove anything, just cjeck the SALES NUMBERS and there is the proof.”

Neither sales numbers nor how many you see in your neighborhood have much to do with whether a car is “any good.” The 3 series is the car with “panache” in its class, and that sells a lot of cars. Never mind, that many BMW drivers are way too busy on their cell phones to apprecate the fantastic machines they’re driving.

The Lexus IS sold 40,372 in 2008, and 27,911 through September of 2009. To the extent that numbers of sales mean anything, there are a lot of cars that sell in smaller numbers. Regardless of sales numbers, the IS is a very nice car.

The GS and, especially, the SC sell in much smaller numbers, and it probably doesn’t make sense to continue them.

Most BMW, owners, particularly 3 series , that I meet have something in common, they lease their cars which come with FREE maintenance and ANY and ALL repairs/replacements of parts (except tires) because as they have pointed out to me, a “simple” brake job can go for up to $700 since the rotors cannot be cut and must be replaced, so as a matter of economics, when you compare with MB or Audi or any other luxury brand, it makes sense when you lease a BImmer. I am not aware of sales #’s for the IS but I see a lot of them, mostly former Toyota owners who had a good experience with reliability and they want ot move up to a luxury car w/o losing their shirts. besides Lexus service is way better than Toyota, even though many times, it’s the same dealership.

The Honda Fits coming to the US seem to be from Japan, at least the ones my friends have. I suspect the ones made in Brazil are for the South American market, and the production moved to the US will be from Japan. The plants in Brazil and Thailand (and Indonesia and China) will continue to operate to serve their home markets.

The failed domestics can’t make a small car profitably in the USA, and make Daewoo Chevys in S Korea,

We’ll see once the Cruze and the micro Chevy Spark (to be built in MICHIGAN!) get into production.

Profitability is not all about WHERE something is built. It’s also about how much components cost (with the falling dollar, the transplants have no choice but to build here), and the Engineering/Development costs.

Taking advantage of the skill in the Asia Pacific countries to design and engineer a small car is very smart on GM’s part.